The following accounts and corresponding balances were drawn from Osprey Companys Year 2 and Year 1 year-end
Question:
The following accounts and corresponding balances were drawn from Osprey Company’s Year 2 and Year 1 year-end balance sheets:
During the year, $84,000 of unearned revenue was recognized as having been earned. Rent expense for Year 2 was $24,000.
Required
Based on this information alone, prepare the operating activities section of the statement of cash flows assuming the direct approach is used.
Account Title Unearned revenue Prepaid rent Year 2 Year 1 $4,500 5,200 $6,000 3,600
Step by Step Answer:
Reconciliation of Unearned Revenue ...View the full answer
Introductory Financial Accounting for Business
ISBN: 978-1260299441
1st edition
Authors: Thomas Edmonds, Christopher Edmonds
Related Video
Unearned revenue is money received by an individual or company for a service or product that has yet to be provided or delivered. It can be thought of as a \"prepayment\" for goods or services that a person or company is expected to supply to the purchaser at a later date. As a result of this prepayment, the seller has a liability equal to the revenue earned until the good or service is delivered. This liability is noted under current liabilities, as it is expected to be settled within a year.
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